Four days after selecting a new chairman, Diebold has begun searching for a new chief executive officer. The company announced that Tom Swidarski, president and chief executive officer, is leaving the company immediately.
While the strategy might have been good, the results weren’t what Diebold’s directors wanted.
On Thursday, the board announced that Thomas W. Swidarski, 54, no longer was president and chief executive officer. He had been with Diebold for 17 years, including the last seven as the top executive.
Diebold’s board has begun searching for a new CEO.
In the meantime, George S. Mayes Jr. will direct daily operations as the new chief operating officer. Mayes will report directly to Henry D.G. Wallace, who on Monday took over as executive chairman. Wallace will oversee the company until a new chief executive is hired.
As the company announced Swidarski’s departure, it also offered a weak preliminary report on fourth-quarter and year-end earnings. Earnings per share are coming below expectations, although Diebold did see revenue increase by about 6 percent.
The dual announcements didn’t go over well with investors. Diebold’s shares dropped $2.75 to close at $29.91. Nearly 3.4 million shares were traded on Thursday, well above the three-month average of 452,000 per day.
In a statement issued by the company, Wallace called the board’s decision to replace Swidarski difficult.
Board members believe the company strategies are sound given progress made in several areas, including integrated services and the growth potential of the electronic security business, Wallace said. But execution of strategies hasn’t been what the board wants or expects, he said.
Diebold has “underperformed against the opportunities in the marketplace,” Wallace said.
He added that “the board’s judgment is that given the company’s ongoing performance and pace with which it is delivering tangible value, it is in our stakeholders’ best interests to make a change in leadership at this time.”
Mayes and Wallace are familiar with Diebold, and both have a background in the auto industry.
Wallace, 67, has been a director since 2003. He became executive chairman replacing John N. Lauer, 73, who will retire in April. Lauer had been non-executive chairman since 2005 and stepped down to comply with Diebold’s retirement policy.
Mayes, 54, joined Diebold in 2005 as vice president for global manufacturing. Since 2008 he has been vice president of global operations.
Wallace worked 30 years at Ford Motor Co. and retired as a former group vice president and chief financial officer. Wallace is chairman of Lear Corp.’s board and a director at Ambac Financial Group.
Mayes served as chief operating officer and a director at Tinnerman Palnut Engineered Products before coming to Diebold. He started his career at General Motors, where he spent 15 years in manufacturing, quality and engineering.
Wallace said Mayes will study all aspects of Diebold’s operations and identify areas where the company can move faster to reduce cost structure and capitalize on changes in the marketplace.
Page 2 of 2 - “His track record of delivering sound, fiscally responsible results in his career makes him ideally suited to lead our operations during this time of transition,” Wallace said of Mayes.
The new management team expects to have a report about the company’s progress in two weeks when Diebold releases its 2012 earnings report and talks with investors.
SEARCH IS ON
There is no time frame for selecting a new chief executive officer, other than to move as quickly as possible, said Mike Jacobsen, company spokesman.
The search “will focus on attracting a candidate with a proven track record for successfully executing growth strategies in a global software and services environment,” Wallace said.
Swidarski became Diebold’s chief executive officer in December 2005 following the abrupt resignation of Walden O’Dell. He had been president and chief operating officer for several months before that.
Diebold’s attempt under O’Dell’s tenure to develop an election machine business tarnished the company’s image, which led to questions and even shareholder lawsuits. Swidarski was credited with correcting problems within the elections business before the operation was sold.
Wallace credited Swidarski for providing leadership and integrity during his tenure as chief executive.